Bridging Loan Rates: What to Expect in 2026

Bridging loan rates in the UK currently range from around 0.55% to 1.5% per month, with the majority of deals pricing between 0.65% and 0.95% per month. These figures reflect the market as of July 2026, drawing on rate cards from specialist lenders across the sector.

Unlike a standard mortgage, bridging loan rates are almost always quoted as a monthly percentage rather than an annual rate. This is because bridging finance is designed as a short-term product, typically lasting between 3 and 18 months. A rate of 0.75% per month may sound modest, but it equates to roughly 9% on an annualised basis, so it is important to understand the true cost before committing.

The rate you are offered will depend on several factors, including the loan-to-value ratio, the type and condition of the property, and the strength of your exit strategy. Borrowers with lower LTVs, clean credit histories and a clearly documented exit route will typically secure rates at the lower end of the range.

For a full overview of how bridging loans work and when they are used, see our bridging loans guide.

If you are comparing bridging finance options, the headline monthly rate is only part of the picture. Arrangement fees, valuation costs and legal charges all add to the total cost of borrowing, so it pays to look beyond the rate alone when assessing affordability.

Bridging loan rates are expressed as a monthly percentage of the loan amount. A rate of 0.75% per month on a £200,000 loan means you are charged £1,500 in interest each month. On an annualised basis, that equates to roughly 9% or more once compounding is taken into account, which is significantly higher than a typical residential mortgage but reflects the speed, flexibility and short-term nature of bridging finance.

How and when you pay that interest depends on the repayment structure your lender offers. There are three main approaches.

Serviced interest

With serviced interest, you make monthly interest payments throughout the loan term, similar to a standard mortgage. This keeps the loan balance static and reduces the total interest you pay over the term. It is most common where the borrower has regular income to support the payments.

Retained interest

Retained interest is deducted from the loan advance at the outset. The lender calculates the total interest for the agreed term and holds it back, so you receive a net advance after interest has been reserved. If you repay early, you may receive a partial refund of the retained interest, depending on the lender's terms.

Rolled-up interest

With rolled-up interest, no monthly payments are made. Instead, the interest accrues and is added to the loan balance each month, then repaid in full along with the capital when the loan is redeemed. This maximises the amount available to you at drawdown but increases the total cost because you are effectively paying interest on interest as the term progresses.

The choice of interest structure can make a material difference to your total outlay. Use our bridging loan calculator to model how each approach affects the cost for your specific loan amount and term.

The rate you are offered on a bridging loan depends largely on the risk profile of the deal. Lenders group applications into broad risk tiers, each carrying a different rate band. The table below shows the typical pricing as of mid-2026.

At the prime end of the market, borrowers with strong equity positions, good credit and a straightforward residential property can expect rates from around 0.55% to 0.69% per month. These deals typically involve a loan-to-value ratio below 60%, a clear exit strategy such as a confirmed mortgage offer, and a property in standard condition with no unusual characteristics.

The mainstream band covers the majority of bridging loan applications. Borrowers in this range are usually borrowing at 65% to 75% LTV, often for chain-break purchases, auction completions or light refurbishment projects. Credit histories may include minor blemishes but nothing severe. Rates here typically fall between 0.70% and 0.95% per month.

At the specialist end, rates of 0.95% to 1.5% or above reflect higher-risk lending. This includes applications at 75% to 80% LTV or above, borrowers with adverse credit such as county court judgments or defaults, and properties that are non-standard, semi-commercial or in poor condition. Lenders willing to operate in this space charge a premium for the additional risk, but competition among specialist bridging providers means rates are often negotiable even at this tier.

Your position within these bands is not fixed. Steps such as reducing the LTV by increasing your deposit, strengthening your exit strategy or addressing credit issues before applying can all move you into a lower-cost tier.

Several factors combine to determine the bridging loan rate a lender will quote you. Understanding these gives you a realistic expectation of where your application will sit and where there may be room to negotiate.

Loan-to-value ratio

LTV is the single biggest driver of your rate. The lower the proportion of the property value you need to borrow, the less risk the lender carries. A loan at 50% LTV will almost always attract a lower rate than the same loan at 75% LTV, because the lender has a larger equity cushion if the property needs to be sold to recover the debt.

Property type and condition

Standard residential properties in good condition are the easiest for lenders to value and, if necessary, sell. Non-standard construction, commercial or semi-commercial property, land without planning permission and properties in poor condition all carry higher rates because they present greater valuation uncertainty and a slower potential sale process.

Exit strategy

Your exit strategy is how you plan to repay the bridging loan. A confirmed mortgage offer in principle, a signed sale contract or evidence of committed development finance will typically secure a better rate than a vague intention to refinance or sell. Lenders want confidence that the loan will be repaid within the agreed term, and a well-documented exit is the strongest reassurance you can provide.

Credit history

Clean credit histories attract the lowest rates. Adverse credit markers such as missed payments, defaults, county court judgments or a previous bankruptcy will push you into higher-rate territory. Some specialist lenders focus specifically on adverse credit bridging, but you should expect to pay a premium of 0.2% to 0.5% per month compared with an equivalent application from a borrower with a clean record.

Regulated vs unregulated

Bridging loans secured against a property you live in, or intend to live in, are regulated by the Financial Conduct Authority. Regulated bridging loans tend to carry slightly lower rates, typically 0.1% to 0.2% per month less than equivalent unregulated deals, because the regulatory framework reduces the lender's risk exposure. However, they also involve longer processing times and stricter affordability checks. For a detailed comparison, see our guide to regulated bridging loans.

The headline monthly rate is only one component of the total cost of a bridging loan. Arrangement fees, exit fees, valuation charges and legal costs all contribute to the final figure. The worked examples below show how these elements combine across three common scenarios, using rolled-up interest for simplicity.

Scenario 1: Chain-break purchase

A borrower needs £150,000 to complete a purchase while waiting for their existing property to sell. The loan runs for 3 months at 0.75% per month. Monthly interest is £1,125, giving total interest of £3,375. With a 2% arrangement fee of £3,000, the total cost of the bridging loan comes to £6,375.

Scenario 2: Auction purchase

A buyer secures a property at auction for £250,000 and needs to complete within 28 days. The bridging loan runs for 6 months at 0.85% per month while longer-term finance is arranged. Monthly interest is £2,125, giving total interest of £12,750. The 2% arrangement fee adds £5,000, bringing the total cost to £17,750.

Scenario 3: Light refurbishment

An investor borrows £400,000 to purchase and refurbish a property before refinancing onto a buy-to-let mortgage. The loan term is 12 months at 0.95% per month. Monthly interest is £3,800, giving total interest of £45,600. The 2% arrangement fee is £8,000, making the total cost £53,600.

These examples use simplified figures and assume no early repayment or additional charges. Your actual costs will depend on the lender, the specific deal structure and any additional fees that apply. To model your own figures with current rates, use our bridging loan calculator.

It is worth noting that repaying early can reduce your total interest cost significantly, particularly on longer-term loans where the interest is rolled up. Always check whether your lender charges an early repayment penalty or imposes a minimum interest period before assuming you can save by exiting ahead of schedule.

Bridging loan rates are higher than most other forms of secured borrowing, but the comparison is not straightforward because bridging finance serves a fundamentally different purpose.

A typical residential mortgage in mid-2026 carries a rate of around 4% to 5% per annum. A secured loan sits at roughly 5% to 8% per annum, depending on LTV and credit profile. A commercial mortgage typically falls in the range of 5% to 7% per annum. By comparison, a mainstream bridging loan at 0.75% per month equates to roughly 9% annualised, and higher-risk deals can reach 15% or more.

The premium reflects what bridging finance delivers that other products cannot: speed of completion, often within 7 to 14 days; flexibility on property type and borrower circumstances; and short-term availability without a long-term commitment. For a chain-break purchase where a three-month delay would cost you the property, or an auction completion where exchange-to-completion is 28 days, the additional interest cost is often far less than the financial consequence of missing the opportunity.

The Bank of England base rate stood at 4.5% as of June 2026, down from 5.25% at its 2023 to 2024 peak. This easing has fed through into slightly lower bridging rates compared with 2024, though the reduction has been modest because lender margins and the cost of short-term wholesale funding have not fallen at the same pace. If the base rate continues to ease through the second half of 2026, further marginal reductions in bridging rates are possible but not guaranteed.

For a broader view of mortgage options, see our mortgages hub.

Securing the lowest possible bridging loan rate requires preparation across several fronts. The following steps will give you the strongest negotiating position.

Lower your loan-to-value ratio wherever possible. If you can increase your cash contribution or use equity in another property as additional security, a lower LTV will move you into a cheaper rate band. Even a small reduction, from 75% to 70% for example, can save 0.1% to 0.2% per month on your rate.

Document your exit strategy thoroughly before approaching lenders. A mortgage agreement in principle, a solicitor's confirmation of an exchange or a detailed development appraisal with planning consent all demonstrate that you have a credible, time-bound plan to repay. Lenders price uncertainty into their rates, so removing that uncertainty works directly in your favour.

Address any credit issues in advance if time allows. Settling outstanding defaults, correcting errors on your credit file or simply waiting until a CCJ drops off after six years can shift you from specialist to mainstream pricing.

Compare multiple lenders rather than accepting the first quote. Bridging is a competitive market with dozens of specialist providers, and rates for apparently identical deals can vary by 0.2% to 0.3% per month between lenders. Using a whole-of-market comparison through Money Saving Advisors ensures you see options from across the market, not just one broker's panel.

Look beyond the headline rate

The monthly interest rate is not the full picture. Arrangement fees typically range from 1% to 2% of the loan amount. Some lenders charge exit fees of 1% or more. Valuation fees, legal costs and broker fees all add to the total. A loan at 0.65% per month with a 2% arrangement fee and a 1% exit fee may cost more overall than a loan at 0.75% per month with a 1% arrangement fee and no exit fee. Always compare the total cost of borrowing, not just the headline rate.

Minimum interest periods are another cost to watch. Some lenders require you to pay a minimum of three or six months' interest regardless of when you repay. If you expect to exit the loan quickly, this clause can significantly increase the effective cost.

Important: Bridging loans are secured against property. If you are unable to keep up repayments or repay the loan at the end of the term, the property used as security may be repossessed. The information on this page is for general guidance only and does not constitute financial advice. You should seek independent professional advice before making any financial decisions.

For more on residential bridging options, see our guide to residential bridging loans.